Derivatives issues in Investment Management

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Saturday, December 20

BNY Mellon partners Markit for automating OTC post-trade

by Sean Sprackling on Sat 20 Dec 2008 10:39 GMT

BNY Mellon Asset Servicing, the global leader in securities servicing, today announced it has enhanced its over-the-counter (OTC) derivatives services by providing automated OTC trade affirmation and confirmation to investment managers and financial institutions in the United States and Europe. The enhancements also enable BNY Mellon to deliver daily, automated OTC position reconciliation and market value reconciliation with counterparties.

On behalf of its clients, BNY Mellon can now match economic terms of the transaction on trade date, confirm activity through straight-through processing and reconcile positions, and perform valuation comparison. In providing these services, BNY Mellon has licensed the use of Markit Trade Manager, a leading trade risk management platform. Additionally, BNY Mellon has licensed MarkitPortRec platform, an automated position reconciliation and valuation comparison service. Markit also will provide complete connectivity to industry utilities such as Markit Wire and DTCC.

"We have a multi-year program of investing in derivatives services and ... more »

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Thursday, December 18

GlobeOp integrates auto-novation processing with DTCC Deriv/Serv

by Sean Sprackling on Thu 18 Dec 2008 10:35 GMT

GlobeOp Financial Services (LSE:GO.), a leading independent provider of business process outsourcing, financial technology services and analytics to hedge funds and asset managers, today announced the availability of automated novation processing for credit derivatives.

The service supports the Operation Management Group's (OMG) commitment that the industry will implement automated novations for credit derivatives by the end of 2008.

Auto-novation enables all trade counterparties to receive real-time notification, standardised information and novation consent electronically via DTCC Deriv/SERV. Through GlobeOp's direct, real-time link to DTCC, clients can execute novations electronically, and be fully integrated with GlobeOp's straight-through-processing (STP) into trade booking, accounting, risk and other systems. The entire process occurs within GlobeOp's GoOTCTM over-the-counter (OTC) derivatives trade processing system.

"Providing this link to the Deriv/SERV novation process helps clients reduce operational risk by replacing novation consent emails with a robust real-time electronic platform," said Jon Anderson, global head of OTC derivatives. "GlobeOp's ... more »

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Tuesday, December 2

Netting & pair off delivered with TRAX® v2.9

by Sean Sprackling on Tue 02 Dec 2008 20:07 GMT

Press release - 2 December 2008

Xtrakter®, the market utility, is pleased to announce the launch of TRAX® V2.9. TRAX® v2.9 offers clients a host of new capabilities including: netting and pair off reporting, active and passive confirmation, audit facilities.

Kevin Milne, Chief Executive, Xtrakter® commented “TRAX® v2.9 has been developed in conjunction with the TRAX® community over the last 12 months. The latest version offers users access to a wide range of new functionality, helping them to further decrease their operational costs. We aim to continue working with our clients to make the TRAX system even better and plan to enhance our STP capabilities going forward into 2009.”

TRAX® is the leading post-trade, pre-settlement, trade matching & regulatory confirmation system in use by the OTC market. TRAX® has been operating successfully since 1989 and has over 200 subscribers located globally. TRAX® processes on average 1.5 million transactions daily.

TRAX® ... more »

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OTC Derivative Operations in Fund Managment - Conference Notes

by Sean Sprackling on Tue 02 Dec 2008 17:29 GMT

Last week I was lucky enough to chair the second day of this event . It was well organised, as Osney events tend to be, and fairly well attended given the current environment. There was also a nice mix of speakers there from the US, Holland, Germany, France and the UK, so here are some highlights:

- Clearly the appetite for otc derivatives has not diminished despite what is happening in the markets
- The focus has shifted from the confirmation space to look at risk mitigation in its wider sense ie collateral management, operational risk, legal risk as well as investment risk
- Buyers are therefore looking for the killer "solution" - preferably in one system - but this has yet to emerge
- New areas to look out for were reconciliation services and compression services
- CDS Clearing centrally is almost upon us

To me the most interesting ... more »

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OFT decides against further analysis of derivatives clearing market

by Sean Sprackling on Tue 02 Dec 2008 12:02 GMT

The OFT has decided not to undertake any work in the market for derivatives clearing, after inviting views earlier this year.

The OFT called for submissions on the broader issue of competition in this market in May after it concluded that ICE Clear Europe's regulatory provisions did not have a significantly adverse effect on competition.

In reaching its decision, the OFT considered both the submissions it received from interested parties, and recent developments in the market. It concluded that, whilst some potential concerns about the competition effects of vertical integration between derivatives exchanges and clearing the transactions on them were raised, no specific action is required at present because:

Regulatory initiatives from both the US and EU suggest that now would not be an appropriate time for the OFT to take further action other than to monitor developments closely.
The industry is characterised ... more »

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Press releases 2008 - 27 November 2008